Yes you can use a POS phone with a SIM card adapter. You can also pop the iPhone 4 SIM right into a Go Phone - I've tested just yesterday in my mom's Go Phone.
I've tested the iPhone 4 SIM in several non-smart phones and all work just fine to call/text. I have some Chinese phone I bought off eBay that is supposed to have 3G but I can't get the iPhone 4 SIM to connect/work for data in the Chinese phone. I'm sure the settings are all wrong, and the Engrish menus are so un-navigable that it's virtually impossible to figure out how to change the settings.
I'm in the same boat as you. I actually was planning on using my original iPhone, but I managed to mess up the SIM reader on the logic board the other day, so now I'll be stuck using my old SE T610 or the said Chinese phone.